CAR_Public/011017.mbx             C L A S S   A C T I O N   R E P O R T E R

           Wednesday, October 17, 2001, Vol. 3, No. 203


                           Headlines


ART TECHNOLOGY: Bernstein Liebhard Initiates C.D. CA Securities Suit
BROADCOM CORPORATION: Spector Roseman Lodges C.D. CA Securities Suit
CALIFORNIA AMPLIFIER:Spector Roseman Lodges Securities Suit in C.D.CA
CHRONIMED INC.: Denies Minnesota Securities Suit Allegations
CRAYFISH COMPANY: Pomerantz Haudek Commences S.D. NY Securities Suit

E.PIPHANY INC.: Bernstein Liebhard Commences S.D. NY Securities Suit
EL SITIO: Marc Henzel Commences Securities Suit in S.D. New York
FREEMARKETS INC.: Faruqi Faruqi Initiates Securities Suit in W.D. PA
GLOBALSTAR TELECOMMUNICATIONS: Shalov Stone Files NY Securities Suit
INTERNET SECURITY: Wolf Haldenstein Lodges Securities Suit in N.D. GA

INTERTRUST TECHNOLOGIES: Marc Henzel Lodges Securities Suit in S.D.NY
JNI CORPORATION: Faruqi Faruqi Raises Securities Suit in S.D. CA
KEITHLEY INSTRUMENTS: Spector Roseman Initiates Securities Suit in OH
K-TEL INTERNATIONAL: MN Securities Suit Dismissed, Appeal Pending
LABOR READY: West Virginia Court Upholds Arbitration With Workers

LOUDCLOUD INC.: Berman De Valerio Commences Securities Suit in S.D.NY
MULTEX.COM: Faruqi Faruqi Initiates Securities Suit in S.D. New York
NANOPHASE TECHNOLOGIES: Settles Securities Suit For $800T In Illinois
PNV INC.: Bernstein Liebhard Commences Securities Suit in S.D. NY
PURCHASEPRO.COM: Faruqi Faruqi Commences Securities Suit in Nevada

QUIETFLEX MFG CO.: 80 Employees Allege Racial Bias in Texas Suit
SIRIUS SATELLITE: Calls Securities Suit "Frivolous" and "Without Merit"
TURNSTONE SYSTEMS: Specter Roseman Initiates N.D. CA Securities Suit
WIRELESS FACILITIES: Marc Henzel Commences Securities Suit in S.D. NY
WINSTAR COMMUNICATIONS: Spector Roseman Initiates NY Securities Suit


                          *********

ART TECHNOLOGY: Bernstein Liebhard Initiates C.D. CA Securities Suit
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Bernstein Liebhard and Lifshitz LLP commenced a securities class action
lawsuit on behalf of purchasers of Art Technology Group, Inc. (NASDAQ:
ARTG) securities between January 25, 2001 and April 2, 2001.

The case is pending in the United States District Court for the Central
District of California and names as defendants, the Company and its co-
founders, Chief Executive Officer Jeet Singh and Chairman of the Board,
Joseph Chung.

The complaint charges defendants with violations of sections 10(b) and
20(a) the Securities Exchange Act of 1934 and Rule 10b-5 promulgated
thereunder.   

The defendants allegedly issued to the investing public false and
misleading information that materially misstated the Company's
condition and prospects.  Moreover, the Company failed to disclose
material information necessary to make its prior statements not
misleading.  As a result of these false and misleading statements, the
Company's stock price was artificially inflated throughout the class
period.    

For more information, contact Ms. Linda Flood, Director of Shareholder
Relations by Mail: 10 East 40th Street, New York, New York 10016 by
Phone: (800) 217-1522 or 212-779-1414 by E-mail: ARTG@bernlieb.com or
visit the firm's Website: www.bernlieb.com


BROADCOM CORPORATION: Spector Roseman Lodges C.D. CA Securities Suit
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Spector, Roseman & Kodroff, P.C. commenced a class action lawsuit in
the United States District Court for the Central District of California
against Broadcom Corporation (NASDAQ:BRCM).

The suit was filed on behalf of investors who purchased Broadcom
Corporation securities during the period from October 18, 2000 through
February 26, 2001.

The complaint charges the Company and certain of its officers and
directors with violations of the Securities Exchange Act of 1934.

The complaint also alleges that the defendants made positive but false
statements about the Company's results and business, while concealing
information about agreements with certain companies it acquired.  These
statements essentially resulted in the Company buying its own revenues.

As a result, Company stock traded at artificially inflated levels,
permitting the three individual defendants to sell $45.8 million worth
of their Company stock.

Then, on February 2001, The Wall Street Journal published an article on
the Company entitled "Warrant Deals Raise Concerns on Broadcom," in
which analysts and accounting experts questioned the ``legitimacy'' of
the transactions and termed the agreements "troubling".

The Company's stock immediately dropped, falling 16% to $53, before
closing at $53.625 on February 27, 2001, and falling to $49.25 on
February 28, 2001.

For more information, contact Robert M. Roseman by Phone: 888-844-5862
(toll-free) by E-mail: classaction@spectorandroseman.com or visit the
firm's Website: www.spectorandroseman.com


CALIFORNIA AMPLIFIER:Spector Roseman Lodges Securities Suit in C.D.CA
---------------------------------------------------------------------
Spector, Roseman & Kodroff, P.C. raised a class action lawsuit in the
United States District Court for the Central District of California
against California Amplifier, Inc. (NASDAQ: CAMP).

The suit was brought on behalf of purchasers of California Amplifier
stock during the period from April 7, 2000 through March 28, 2001,
inclusive.  The complaint charges the Company with violations of the
Securities Exchange Act of 1934.

In March 2001, the Company announced that it would restate its fiscal
2000 financial statements because of accounting misstatements.  

In a press release, the Company revealed that during preparation for
the Company's fiscal year 2001 audit examination, their corporate
controller abruptly resigned.  The controller revealed in a letter that
he made certain adjustments to the Company's accounting records that
caused a reduction in recorded expenses which may have resulted in
overstating net income for the fiscal year ended February 26, 2000 by
as much as $2.2 million, or $.18 per basic share.  

The Company said that it was actively investigating the circumstances
reported by the controller but has not yet been able to interview the
controller fully.

As a result, they were unable at this time to reach any definitive
conclusions as to the exact expenses or fiscal year 2000 quarters that
are affected by this alleged overstatement.  

Due to these developments, the previously scheduled release of earnings
for the fourth quarter and the fiscal year ended March 3, 2001 on April
19, 2001 was postponed to a future date to be announced.  

On this news, trading in the Company's shares was halted at $5.03 - or
more than 90% lower than the class period high of $59.25.  

For further details, contact Robert M. Roseman by Phone: 888-844-5862
(toll-free) by E-mail: classaction@spectorandroseman.com or visit the
firm's Website: www.spectorandroseman.com


CHRONIMED INC.: Denies Minnesota Securities Suit Allegations
------------------------------------------------------------
Chronimed, Inc. denied the allegations in several securities class
action suits filed against them in the United States District Court for
the District of Minnesota.

The first suit commenced in June 2001, naming as defendants the Company
and certain of their current and former officers and directors.

The suit alleged that the defendants violated Section 10(b) of the
Securities Exchange Act of 1934 and Rule 10(b)-5 promulgated
thereunder, and that the individual defendants violated Section 20(a)
of the Exchange Act.

Eight other lawsuits asserting claims identical to the Barclay case
were brought by other plaintiffs during the weeks following the
initial filing.  The nine lawsuits have been consolidated into a single
case.

The suits generally allege that the Company made false and misleading
statements about their financial statements in violation of the
securities laws.  The alleged violations arise out of the requirement
to restate previously issued financial statements.

The Company asserted in a regulatory filing that the claims are "wholly
without merit."


CRAYFISH COMPANY: Pomerantz Haudek Commences S.D. NY Securities Suit
--------------------------------------------------------------------
Pomerantz Haudek Block Grossman & Gross LLP filed a securities class
action suit on behalf of purchasers of more than 4 million American
Depository Shares arising out of the March 8, 2000 initial public
offering by Crayfish Co., Ltd. through August 22, 2000, inclusive.

The suit, filed in the United States District Court for the Southern
District of New York, charges the Company of violating Sections 11,
12(a)(2) and 15 of the Securities Act of 1933.

The Company allegedly misled investors by disseminating materially
false and misleading information to the investing public concerning the
Company's business prospects and materially overstating the Company's
projected growth.

For more details, contact Andrew G. Tolan by Phone: 1-888-4-POMLAW (1-
888-476-6529) (toll-free) by E-mail: agtolan@pomlaw.com or visit the
firm's Website: www.pomerantzlaw.com.

Those who inquire by e-mail are encouraged to include their mailing
address and voice telephonic number.


E.PIPHANY INC.: Bernstein Liebhard Commences S.D. NY Securities Suit
--------------------------------------------------------------------
Bernstein Liebhard and Lifshitz, LLP initiated a securities class
action lawsuit on behalf of purchasers of E.piphany, Inc. (NASDAQ:
EPNY) securities between September 21, 1999 and December 6, 2000.

The case is pending in the United States District Court for the
Southern District of New York and names as defendants, the Company and:

     (1) Roger S. Siboni,

     (2) Kevin J. Yeaman,

     (3) Eliot L. Wegbreit,

     (4) Credit Suisse FirstBoston Corporation,

     (5) Merrill Lynch, Pierce, Fenner & Smith, Incorporated, and

     (6) BancBoston Robertson Stephens, Inc.

The complaint charges defendants with violations of the Securities Act
of 1933 and the Securities Exchange Act of 1934 for issuing a
registration statement and prospectus that contained materially false
and misleading information and failed to disclose material information.  

The prospectus was issued in connection with the Company's initial
public offering of 4,150,000 shares of common stock at $16.00 per share
that was completed on September 21, 1999.  The complaint alleges that
the prospectus was false and misleading because it failed to disclose
that:

     (i) the underwriter defendants' agreement with certain investors
         to provide them with significant amounts of restricted
         Company shares in the IPO in exchange for exorbitant and
         undisclosed commissions; and

    (ii) the agreement between the underwriters and certain of its
         customers whereby the underwriters would allocate shares in
         the IPO to those customers in exchange for the customers'
         agreement to purchase Company shares in the aftermarket
         at pre-determined prices.

For further details, contact Ms. Linda Flood, Director of Shareholder
Relations, by Mail: 10 East 40th Street, New York, New York 10016 by
Phone: (800) 217-1522 or 212-779-1414 by E-mail: EPNY@bernlieb.com or
visit the firm's Website: www.bernlieb.com


EL SITIO: Marc Henzel Commences Securities Suit in S.D. New York
----------------------------------------------------------------
The Law Firm of Marc S. Henzel initiated a securities class action suit
on behalf of purchasers of El Sitio, Inc. (NASDAQ: LCTO) common stock
between December 9, 1999 and June 7, 2001, inclusive.

The suit, filed in the United States District Court for the Southern
District of New York, names as defendants the Company and:

     (1) Roberto Vivo-Chaneton,

     (2) Roberto Cibrian-Campoy,

     (3) Horacio Milberg,

     (4) Alfredo Jimenez de Arechaga,

     (5) Carlos Cisneros,

     (6) Michael Greeley,

     (7) Guillermo Liberman,

     (8) Ricardo Verdaguer,

     (9) Michael Levitt,

    (10) Sofia Pescarmona,

    (11) Credit Suisse First Boston Corporation,

    (12) Lehman Brothers Inc.,

    (13) Merrill Lynch, Pierce, Fenner & Smith Incorporated,

    (14) Salomon Smith Barney, Inc., and

    (15) Wit Capital Corporation

The defendants allegedly violated the federal securities laws by making
material omissions in connection to the December 9, 1999 Company IPO

The Company allegedly failed to disclose:

     (1) that some of the underwriters in the offering had solicited
         and received excessive and undisclosed commissions from
         certain investors;

     (2) in exchange for the excessive commissions, the underwriter
         defendants allocated Company shares to customers at the IPO
         price of $16.00 per share.

To receive the allocations at $16.00, the underwriters' brokerage
customers allegedly had to agree to purchase additional shares in the
aftermarket at progressively higher prices.

The requirement that customers make additional purchases at
progressively higher prices as the price of El Sitio stock rocketed
upward was intended to drive El Sitio's share price up to artificially
high levels.

This artificial price inflation enabled both the underwriters and their
customers to reap enormous profits by buying stock at the $16.00 IPO
price and then selling it later for a profit at inflated aftermarket
prices.

Rather than allowing their customers to keep their profits from the
IPO, the underwriters required their customers to ``kick back'' some of
their profits in the form of secret commissions.

These secret commission payments were sometimes calculated after the
fact, based on how much profit each investor had made from his or her
IPO stock allocation.

For more details, contact Marc S. Henzel by Mail: 273 Montgomery Ave.,
Suite 202, Bala Cynwyd, PA 19004 by Phone: (610) 660-8000 or (888) 643-
6735 by Fax: (610) 660-8080 by E-Mail: mhenzel182@aol.com or visit the
firm's Website: http://members.aol.com/mhenzel182


FREEMARKETS INC.: Faruqi Faruqi Initiates Securities Suit in W.D. PA
--------------------------------------------------------------------
Faruqi and Faruqi LLP lodged a securities class action suit on behalf
of all purchasers of FreeMarkets, Inc. (NASDAQ: FMKT) common stock
between July 24, 2000 through April 23, 2001, inclusive.   The suit was
filed was commenced in the United States District Court for the Western
District of Pennsylvania.

The complaint charges that defendants violated Sections 10(b) and 20(a)
of the Securities Exchange Act of 1934, and Rule 10b-5 promulgated
thereunder.  The complaint also alleges that the defendants issued a
series of false and misleading press releases concerning the Company's
financial condition and business prospects.

The Company allegedly failed to properly account for a warrant that it
had provided to one of its largest customers, Visteon Corporation
during the class period.   Moreover, the Company is charged with
improperly accounting for its financial results for the second, third
and fourth quarters and the year of fiscal 2000.

As a result, the price of the Company's common stock was artificially
inflated, allowing defendants to collectively sell millions of dollars
worth of shares in personally held Company common stock.

Later, the Company revealed that the Securities and Exchange Commission
staff had informed the company that its payments from Visteon should
not be classified as revenue, but as money paid for the warrant.

As a result, the company said it would amend its financial statements
to eliminate all the revenue it had received from Visteon during the
class period.

In response, the Company's stock price fell from a close of $10.29 per
share on April 23, 2001 to $9.30 on April 24, 2001, significantly down
from its class period high of $92.063 on September 5, 2001.

For further details, contact Anthony Vozzolo by Mail: 320 East 39th
Street, New York, NY 10016 by Phone: (877) 247-4292 or (212) 983-9330
by E-mail: avozz@faruqilaw.com or visit the firm's Website:
www.faruqilaw.com


GLOBALSTAR TELECOMMUNICATIONS: Shalov Stone Files NY Securities Suit
--------------------------------------------------------------------
Shalov, Stone and Bonner LLP commenced a securities class action
against Globalstar Telecommunications, Ltd. (Nasdaq (SC): GSTRF) in the
United States District Court for the Southern District of New York.

The suit, filed on behalf of purchasers of the Company's common stock
from December 6,1999 to October 27,2000, names as defendants:

     (1) the Company,

     (2) Chief Executive Officer Bernard Schwartz; and

     (3) Parent company, Loral Space and Communications, Ltd.

The suit alleges violations of Sections 10(b) and 20(a) of the Exchange
Act, and Rule 10b-5 promulgated thereunder.


The complaint alleges that:

     (i) the defendants made material misstatements or failed to state
         material facts about the Company's business and prospects; and

     (b) that Loral and Mr. Schwartz are secondarily liable for these
         alleged misstatements and omissions under Section 20(a) of the
         Exchange Act as alleged "controlling persons" of the Company

For more details, contact Ralph M. Stone or Kenneth A. Ricken by Mail:
276 Fifth Avenue, Suite 704 New York, New York 10001 by Phone: (212)
239-4340 by Fax: (212) 686-8005 or visit the firm's Website:
www.lawssb.com


INTERNET SECURITY: Wolf Haldenstein Lodges Securities Suit in N.D. GA
---------------------------------------------------------------------
Wolf Haldenstein Adler Freeman & Herz LLP commenced a securities class
action suit on behalf of purchasers of Internet Security Systems
(NASDAQ:ISSX) between April 5, 2001 and July 2, 2001, inclusive.

The suit was filed in the United States District Court for the Northern
District of Georgia, against the Company and certain of its officers.

The complaint alleges that defendants violated the federal securities
laws by issuing materially false and misleading statements throughout
the class period.  These false and misleading statements artificially
inflated the market price of the Company's securities.

The complaint also alleges that during this period of artificial
inflation, Company insiders sold thousands of their own shares of
Company stock at artificially high prices for proceeds of over $18
million.  The Company further took advantage of the artificially
inflated share prices by using Company stock as currency to make
acquisitions.

In July 2001, however, defendants revealed that rather than achieving
revenues of $64-67 million for the second quarter, the Company's
revenues were actually in the $50-52 million range.

Instead of earning $0.15 to $0.16 per share, the Company would actually
suffer losses of up to $0.02 per share and ultimately, the Company
announced losses of $0.13 per share for the quarter.

As a result of these announcements, the Company's stock fell by more
than 40% in one day, thus causing damages to class members.

For more details, contact Fred Taylor Isquith, Gustavo Bruckner,
Michael Miske, George Peters or Derek Behnke by Mail: 270 Madison
Avenue, New York, New York 10016 by Phone: (800) 575-0735 by E-mail:
classmember@whafh.com or visit the firm's Website: www.whafh.com. All
e-mail correspondence should make reference to ISSX.


INTERTRUST TECHNOLOGIES: Marc Henzel Lodges Securities Suit in S.D.NY
---------------------------------------------------------------------
The Law Office of Marc S. Henzel initiated a securities class action
suit on behalf of all persons and entities who purchased, converted,
exchanged or otherwise acquired the common stock of Intertrust
Corporation (NasdaqNM:ITRU) between October 26, 1999 and May 16, 2001
inclusive.

The suit, filed in the U.S. District Court for the Southern District of
New York, names the Company and certain of its current and former
officers as defendants.

The lawsuit asserts claims under Sections 11, 12 and 15 of the
Securities Act of 1933 and Sections 10(b) and 20(a) of the Securities
Exchange Act of 1934 and Rule 10b-5 promulgated thereunder.

The defendants allegedly issued and sold common stock pursuant to the
IPO and secondary offering without disclosing that some of their
underwriters had received excessive commissions from certain investors.

The suit asserts that, in exchange for the excessive commissions, the
underwriters allocated Company shares to customers at the IPO price of
$18.00 per share. To receive the allocations at $18.00, the
underwriters' brokerage customers allegedly had to agree to purchase
additional shares in the aftermarket at progressively higher prices.

The requirement that customers make additional purchases at
progressively higher prices as the price of Company stock rocketed
upward was intended to drive Intertrust's share price up to
artificially high levels.

This artificial price inflation enabled both the underwriters and their
customers to buy Company stock at the $18.00 IPO price and then sell it
later for a profit at inflated aftermarket prices.

The complaint further alleges that the Company was able to price the
secondary offering of stock at an artificially high $35.00 per share
(or $70.00 per pre-two-for-one-split share) due to the continued
effects of the foregoing violations.

Rather than allowing their customers to keep their profits from the
IPO, the aforementioned defendant underwriters required their customers
to ``kick back'' some of their profits in the form of secret
commissions.

These secret commission payments were sometimes calculated after the
fact, based on how much profit each investor had made from his or her
IPO stock allocation.

The complaint further alleges that defendants violated the Securities
Act of 1933 because their filings with the SEC contained material
misstatements regarding the commissions that the underwriters would
derive from the IPO and secondary offering.

These filings also failed to disclose the additional commissions and
``laddering'' scheme discussed above.

For more information, contact Marc S. Henzel by Mail: 273 Montgomery
Ave., Suite 202 Bala Cynwyd, PA 19004 by Phone: (610) 660-8000 or (888)
643-6735 by Fax: (610) 660-8080 by E-Mail: mhenzel182@aol.com or visit
the firm's Website: http://members.aol.com      


JNI CORPORATION: Faruqi Faruqi Raises Securities Suit in S.D. CA
----------------------------------------------------------------
Faruqi and Faruqi LLP lodged a securities class action suit on behalf
of all purchasers of JNI Corporation (NASDAQ: JNIC) securities between
October 16, 2000 and January 24, 2001, inclusive.

The suit, filed in the U.S. District Court for the Southern District of
California, alleges violations of Sections 10(b) and 20(a) of the
Securities Exchange Act of 1934, and Rule 10b-5 promulgated thereunder.

The suit claims that defendants issued a series of materially false and
misleading statements in SEC filings and press releases about its
business prospects and results causing its stock to trade at
artificially inflated levels.

As a result of this inflation, the Company was able to complete a $382
million stock offering pursuant to a Registration Statement and
Prospectus dated October 19, 2000.

In November 2000, just two and one-half weeks after completing the
offering, the Company admitted that it expected its sales of products
designed to work with the SBus interface to decline.

The Company's stock price declined in early November due to stories
appearing in the press questioning the Company's competitive position
and the pending resignation of its CEO.  However, the defendants
asserted there were no problems with the business and it was "business
as usual".

However, in January 2001, the Company shocked the market when it
reported fourth quarter 2000 revenues of only $30.7 million, causing
analysts to reduce 2001 EPS estimates to $0.80.  As a result of this
disclosure, the Company's stock dropped to as low as $20.00, 84% below
the class period high, on volume of 4.4 million shares.

For more information, contact Anthony Vozzolo by Mail: 320 East 39th
Street, New York, NY 10016 by Phone: (877) 247-4292 or (212) 983-9330
by E-mail: avozz@faruqilaw.com or visit the firm's Website:
www.faruqilaw.com


KEITHLEY INSTRUMENTS: Spector Roseman Initiates Securities Suit in OH
---------------------------------------------------------------------
Spector, Roseman & Kodroff, P.C. commenced a securities class action
suit in the United States District Court for the Northern District of
Ohio against Keithley Instruments, Inc. (NYSE: KEI).

The lawsuit, filed on behalf of purchasers of the Company's stock of
from January 18, 2001 through March 9, 2001, names Joseph P. Keithley,
Chairman, President, and Chief Executive Officer, as co-defendants.

The complaint alleges that defendants violated Sections 10(b) and 20(a)
of the Securities Exchange Act of 1934, and Rule 10b-5 promulgated
thereunder.

The defendants allegedly issued a series of material misrepresentations
to the market during the class period regarding the demand for the
Company's products and its expected revenues.  

Specifically, defendants stated that they anticipated that second
quarter revenues would exceed those of the first quarter, in part,
because of strong demand for the Company's products and the Company's
record backlog.  

These statements were allegedly false and misleading because defendants
knew that the Company was suffering from reduced new equipment orders,
delays in scheduled deliveries and, with respect to semiconductor
customers, canceled orders.

The defendants' statements that their backlog was sufficiently large to
overcome any softness in the economy and would lead to increased sales
and earnings for the second quarter of 2001 were also materially false
and misleading.

The defendants allegedly knew but did not disclose that the backlog was
not a true measure of sales revenue because the backlog was subject to
cancellation or delayed shipment at the "buyer's" discretion.   

Finally, In March 2001, the defendants issued a press release
announcing that sales and earnings for the first quarter of 2001 would
be less than expected and 25% below the sales levels of the first
quarter of 2001.  

The market's reaction to this announcement was immediate and punitive.
Shares of Company stock closed on Monday, March 12, 2001, at $14.95,
from a previous close on Friday, March 9, 2001, of $20.76, on reported
volume of approximately 2.2 million shares.  

Prior to this disclosure, defendant Joseph Keithley sold shares of
Keithley stock for proceeds of approximately $3.2 million, while other
insiders sold shares for proceeds in excess of $5 million.   

For further detais, contact Robert M. Roseman by Phone: 888-844-5862
(toll-free) by E-mail: classaction@spectorandroseman.com or visit the
firm's Website: www.spectorandroseman.com


K-TEL INTERNATIONAL: MN Securities Suit Dismissed, Appeal Pending
-----------------------------------------------------------------
The U.S. District Court for the District of Minnesota dismissed the
class action suit against K-Tel International, Inc. for federal
securities violation.

The consolidated suit arose from twenty-three class actions commenced
in various federal courts in November 1998 against the Company and
certain officers and directors.  The suits generally allege that the
defendants issued of false and misleading statements during the period
November 3, 1998 to 11:30 am on November 17, 1998.

The Company's common stock was listed on the prestigious and highly
liquid Nasdaq National Market.

At least three weeks before November 17, 1998, the Company received a
warning letter from Nasdaq that its common stock faced delisting from
the National Market because it failed to meet NASDAQ's $4 million
minimum asset requirement for continued listing.  Despite the warning
letter, for the next three weeks, the Company concealed this
information and painted a misleadingly positive picture about K-tel,
alleges the complaint.

For example, in November 1998, defendants publicly touted two
partnerships with household corporate names such as Playboy and
Microsoft relating to the Company's new venture as an Internet music
retailer but did not say a word about the possibility of delisting.

These unqualified positive announcements resulted in skyrocketing
prices for the Company's stock.   After the Company belatedly revealed
the possibility of delisting, the Company's stock price dropped 32% on
that day, closing at $12.00, and on the next day fell an additional
17%.  During the Class Period, the stock price had reached over $39 as
a result of defendant's materially misleading representations and
omissions.

The suits were later consolidated in Minnesota court and in July 1999,
the plaintiffs filed an amended consolidated class action complaint.
In July 2000, the court dismissed the consolidated suit and denied the
plaintiffs' request to amend the complaint in order to refile the
complaint in the future.

The plaintiffs promptly appealed the decision, and the Court of Appeals
is scheduled to hear the matter this month.


LABOR READY: West Virginia Court Upholds Arbitration With Workers
-----------------------------------------------------------------
West Virginia Federal District Court blocked a class action filed by
the AFL-CIO Building and Construction Trades Department against Labor
Ready, Inc. (NYSE:LRW)

The court upheld the Company's arbitration agreement with its workers
in the wage and hour case and denied the plaintiff's attempt to add a
number of the Company's customers as co-defendants in the case.

The lawsuit, filed in August 2000, had sought to establish a class of
"thousands of workers."  However, despite 14 months of aggressive and
costly advertising, the union was able to come up with only 64 workers
to comprise the potential class.

The Company's General Counsel Tim Adams lauded the decision, saying,
"We've been convinced from the outset that the sole purpose of this
lawsuit was to harass Labor Ready and its customers."

"Clearly this is the union's campaign, not our workers' campaign,"
observed Adams. "It has been an expensive fiasco for the union."

Labor Ready, Inc. is a provider of temporary manual labor to the light
industrial and small business markets.


LOUDCLOUD INC.: Berman De Valerio Commences Securities Suit in S.D.NY
---------------------------------------------------------------------
Berman DeValerio Pease Tabacco Burt & Pucillo filed a securities class
action suit against Loudcloud, Inc. (NASDAQ:LDCL) today, accusing the
company of misleading the public during its Initial Public Offering.

The lawsuit was filed October 15, 2001 in the U.S. District Court for
the Southern District of New York on behalf of all investors who bought
Loudcloud common stock between March 8, 2001 and May 1, 2001.

The suit accuses the Company of failing to disclose important
information in documents filed with the U.S. Securities and Exchange
Commission (SEC) in connection with its Initial Public Offering.

The suit alleges the Company didn't tell investors about its plans to
substantially reduce its workforce and to restructure itself shortly
after the public offering.  The company also allegedly failed to
disclose that its public offering was not raising funds sufficient for
it to reach profitability and accomplish a planned expansion described
in the prospectus.

In addition, the documents filed with the SEC failed to mention the
imminent cancellation of a major contract to which one of the
underwriters was a party.  Finally, the complaint accuses the company
of making undisclosed sales of shares to insiders to prop up the IPO
and keep the offering prices artificially high.

The company's omissions resulted in investors overpaying for stock they
bought during the IPO and up until the company revealed a restructuring
plan on May 1, 2001.  The lawsuit claims that Company insiders knew
about the need for the restructuring at least as early as the IPO date.

After the announcement, the Company's stock dropped from $6.43 a share
on May 1, 2001 to $4.30 on May 7, 2001. At the time the complaint was
filed, shares in the company were selling at $1.63.

For more information, contact Michael G. Lange by Mail: One Liberty
Square, Boston, MA 02109 by Phone: (800) 516-9926 by E-mail:
law@bermanesq.com or visit the firm's Website: www.bermanesq.com


MULTEX.COM: Faruqi Faruqi Initiates Securities Suit in S.D. New York
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Faruqi and Faruqi LLP commenced a securities class action suit on
behalf of all purchasers of Multex.com Inc. (NASDAQ: MLTX) securities
between March 17, 1999 and December 4, 2000, inclusive.  The suit was
filed in the United States District Court for the Southern District of
New York.

The complaint charges that defendants violated Sections 11, 12 and 15
of the Securities Act of 1933 and Sections 10(b) and 20(a) of the
Securities Exchange Act of 1934, and Rule 10b-5 promulgated thereunder.

The suit also alleges that the Company's offering documents filed in
connection with their initial public offering failed to disclose that
certain underwriters in the offering had solicited and received
additional, excessive and undisclosed commissions from certain
investors.  

In exchange for these commissions, the underwriters allocated to those
investors substantial blocks of Company shares issued in connection
with the offering.  To receive the allocations at $14.00, the
underwriters' brokerage customers allegedly had to agree to purchase
additional shares in the aftermarket at progressively higher prices.

The requirement that customers make additional purchases at
progressively higher prices as the price of Company stock rocketed
upward drove the share price up to artificially high levels.

This artificial price inflation enabled both the underwriters and their
customers to reap enormous profits by buying Company stock at the
$14.00 IPO price and then selling it later for a profit at inflated
aftermarket prices.

For more details, contact Anthony Vozzolo by Mail: 320 East 39th Street
New York, NY 10016 by Phone: (877) 247-4292 or (212) 983-9330 by E-
mail: avozz@faruqilaw.com or visit the firm's Website:
www.faruqilaw.com


NANOPHASE TECHNOLOGIES: Settles Securities Suit For $800T In Illinois
---------------------------------------------------------------------
Nanophase Technologies Corporations (NASDAQ:NANX) entered into an
$800,000 settlement in the securities class action filed against them
for federal securities act violations.

The U.S. District Court for the Northern District of Illinois
preliminarily approved the settlement yesterday.

The suit alleges that the Company, certain of its officers and
directors, and underwriters are liable under the federal Securities
Exchange Act of 1934.

The defendants supposedly issued fraudulent material misstatements and
omissions relating to the solicitation of consents to proceed with the
Offering from certain of the Company's preferred stockholders.

The settlement successfully resolves all claims against all defendants,
without any admission of liability by any party.  The settlement is
subject to notice to class members and final judicial approval at a
subsequent hearing currently scheduled for January 10, 2002.

The Company asserted that the settlement has no material adverse effect
on the Company's business operations or financial position.


PNV INC.: Bernstein Liebhard Commences Securities Suit in S.D. NY
-----------------------------------------------------------------
Bernstein Liebhard and Lifshitz, LLP initiated a securities class
action lawsuit on behalf of purchasers of PNV Inc. (NASDAQ: PNVNE or
OTCBB:PNVNE.OB) securities between November 24, 1999 and May 15, 2000.

The case is pending in the United States District Court for the
Southern District of New York and names certain officers and directors
of PNV, as well as each of the underwriters of PNV's initial public
offering as defendants.  

The complaint alleges that certain of the Company's executive officers
and directors and the underwriters of their initial public offering
misrepresented the capital and financing requirements of the Company in
the prospectus distributed to investors.  

The complaint also alleges that the prospectus misrepresented that the
proceeds of the initial public offering would be sufficient to fund the
Company's rapidly expanding operations for at least eighteen months.  

The Company filed for bankruptcy approximately one year after the date
of the initial public offering.
          
For more information, contact Ms. Linda Flood, Director of Shareholder
Relations by Mail: 10 East 40th Street, New York, New York 10016 by
Phone: (800) 217-1522 or 212-779-1414 by E-mail: PNVNE@bernlieb.com or
visit the firm's Website: www.bernlieb.com


PURCHASEPRO.COM: Faruqi Faruqi Commences Securities Suit in Nevada
------------------------------------------------------------------
Faruqi and Faruqi, LLP initiated a securities class action on behalf of
all purchasers of PurchasePro.com, Inc. (NASDAQ: PPRO) securities
between July 19, 2000 and April 25, 2001, inclusive.

The suit, filed in the United States District Court for the District of
Nevada, alleges violations of Sections 10(b) and 20(a) of the
Securities Exchange Act of 1934, and Rule 10b-5 promulgated thereunder.

The complaint alleges that the defendants issued a series of false and
misleading press releases concerning the Company's financial condition
and business prospects.

Specifically, the complaint alleges that defendants improperly
recognized revenue in order to artificially inflate the price of the
Company's securities for their own personal benefit.

This practice caused the Company's common stock to be inflated,
reaching as high as $44.95 per share, allowing defendants to sell
millions of dollars worth of shares in personally held stock.

However, the Company shocked the market when it announced that it
expected first quarter results to be below estimates "primarily due to
deferred recognition of certain license revenue."

In response, the stock price plummeted approximately 35% in one day
from $6.22 to $4.05, on volume of over 11 million shares.

For more details, contact Anthony Vozzolo by Mail: 320 East 39th Street
New York, NY 10016 by Phone: (877) 247-4292 or (212) 983-9330 by E-
mail: avozz@faruqilaw.com or visit the firm's Website:
www.faruqilaw.com


QUIETFLEX MFG CO.: 80 Employees Allege Racial Bias in Texas Suit
----------------------------------------------------------------
The Mexican American Legal Defense and Educational Fund (MALDEF) has
sued Quietflex Manufacturing Company, an air-conditioning duct
manufacturing firm, in the U.S. District Court in San Antonio.

The suit alleges that Hispanic workers are paid less than Asian workers
and are prevented from transferring to better paying jobs in the
company, according to a recent report in the Houston Chronicle.

MALDEF filed the class-action lawsuit on behalf of 80 employees who
work for Quietflex after the Equal Employment Opportunity Commission
(EEOC) and Quietflex failed to reach a settlement agreement.

Earlier, the regional EEOC had investigated the treatment of Hispanics
at the company, a division of Goodman Manufacturing, after receiving
complaints from 91 Quietflex employees.

The agency found that Quietflex segregated Hispanic employees into
lower-paying, less desirable jobs; denied them transfer to more
desirable jobs and required them to read and speak English as a
condition of promotion.  

Conversely, the Vietnamese employees were not subject to the English
language requirements.

After the talks between the company and the regional EEOC in Houston
broke down, MALDEF, which became representative for the Hispanic
employees when the decision to file a lawsuit was made, invited EEOC to
join the lawsuit.  However, that decision will have to be made at
national headquarters in Washington.

Dan Daniel, President and Chief Executive Officer of Quietflex, said he
has not had a chance to read the lawsuit, but he is confident,
nonetheless, that the court will find no basis for what he calls
"groundless allegations."  

He said the company is willing to pay for English classes so that
Hispanics will be eligible for supervisory positions, which must be
filled by individuals with whom all employees can communicate.  

As to the allegation about wages, he said the company has boosted wages
20 percent to an average hourly wage of $13.37 an hour.


SIRIUS SATELLITE: Calls Securities Suit "Frivolous" and "Without Merit"
-----------------------------------------------------------------------
Sirius Satellite Radio, Inc denounced the securities class action suits
pending against them calling them "frivolous and without merit,
although the complaint was an entertaining piece of fiction."

The suit, filed last month in the U.S. District Court in Burlington,
Vt., alleges violations of Section 10(b) of the Securities Exchange Act
of 1934 and Rule 10b-5 promulgated thereunder.

The suit names, as defendants, the Company and:

     (1) David Margolese, chairman and chief executive officer,

     (2) Robert D. Briskman, executive vice president,

     (3) Patrick L. Donnelly, senior vice president and general
         counsel

The Company and its top executives allegedly inflated the value of the
company's stock by falsely claiming they were able to launch commercial
satellite radio service by late last year.

The lawsuit charges that between Feb. 17, 2000, and April 2, 2001, the
company's management issued press releases and financial reports saying
that Sirius would begin commercial service by the end of 2000 or early
in 2001.

The suit also alleges that the defendants knew all the while that it
was impossible to complete the design and testing of chips for Sirius
car radios until the company's satellites had been launched.  Even
after all three satellites were in operation, the Company issued press
releases and reports saying that service would begin in early 2001.

The Company's officers allegedly knew the final design of chips had
been delayed and that manufacturers had not committed to building
Sirius radios.

In a statement, Donnelly said, "We have fully complied with all
[Securities and Exchange Commission] disclosure requirements and will
vigorously defend ourselves."

A company's spokeswoman declined to comment further on the lawsuit.


TURNSTONE SYSTEMS: Specter Roseman Initiates N.D. CA Securities Suit
--------------------------------------------------------------------
Spector, Roseman & Kodroff, P.C. lodged a class action suit on behalf
of purchasers of the stock of Turnstone Systems, Inc. (NASDAQ:TSTN)
during the period from June 5, 2000 through January 2, 2001, inclusive
including those who acquired their shares in connection with
Turnstone's secondary offering on September 26, 2000.  

The suit was filed in the United States District Court for the Northern
District of California against the Company and certain of its officers
and directors.  The complaint charges the defendants with violations of
the Securities Exchange Act of 1934.  

The Company is a provider of technology for the digital subscriber line
service industry.  The Company's primary product is the Copper
CrossConnect CX100, enables telephone access providers to remotely
evaluate, manage, and control the DSL connections within the telephone
routing system.  This system permits identification of copper lines
that are suitable for DSL and making installation and maintenance of
DSL on those lines cheaper and easier.  

Turnstone's customer base consists almost entirely of Competitive Local
Exchange Carriers, or (CLECs).  

The complaint alleges that, contrary to defendants' representations,
the Company's CX100 product was fraught with problems, including blown
capacitors, malfunctioning chips, and inaccurate calibration of the
CX100.  As a result, and contrary to the representations in the
registration statement/prospectus, the CX100 product was unreliable,
inaccurate and inefficient in deploying DSL services to the Company's
customers.  Moreover, their key customers were returning the product as
a result of the malfunctioning of the CX100.   

In January, the Company warned investors that its 4thQ 2000 revenue
would be "substantially below" market estimates because its CLEC
customers had cancelled and reduced their orders.  As a result, the
Company announced revenue of $26 million to $28 million for the 4thQ
2000, 37% lower than consensus market analyst estimates.  

In the same press release, the Company also disclosed that it expected
to take a $13.0 to $15.5 million charge to increase its inventory
reserves and bad debt reserves.  This caused the Company to forecast an
operating loss of $12 million to $14 million for the quarter.   

For more details, contact Robert M. Roseman by Phone: 888-844-5862 or  
by E-mail: classaction@spectorandroseman.com or visit the firm's
Website: www.spectorandroseman.com


WIRELESS FACILITIES: Marc Henzel Commences Securities Suit in S.D. NY
---------------------------------------------------------------------
The Law Office of Marc S. Henzel initiated a securities class action
suit on behalf of purchasers of Wireless Facilities, Inc. (NASDAQ:
WFII) securities between November 4, 1999 and December 6, 2000,
inclusive.

The suit, filed in the United States District Court, Southern District
of New York, alleges violations of Sections 11, 12(a)(2) and 15 of the
Securities Act of 1933 and Section 10(b) of the Securities Exchange Act
of 1934 and Rule 10b-5 promulgated thereunder.

In November 1999, the Company commenced an initial public offering of
4,000,000 of its shares of common stock at an offering price of $15 per
share.

In connection therewith, the Company filed a registration statement,
which incorporated a prospectus with the Securities and Exchange
Commission.   The complaint further alleges that the prospectus was
materially false and misleading because it failed to disclose, among
other things, that:

     (i) the underwriter in the IPO had solicited and received
         excessive and undisclosed commissions from certain investors
         in exchange for which the underwriter allocated to those
         investors material portions of the restricted number of shares
         issued in connection with the IPO; and

    (ii) the underwriter entered into agreements with customers whereby
         the underwriter agreed to allocate Company shares to those
         customers in the IPO in exchange for which the customers
         agreed to purchase additional shares in the aftermarket at
         pre-determined prices.

For more information, contact Marc S. Henzel by Mail: 273 Montgomery
Ave., Suite 202 Bala Cynwyd, PA 19004 by Phone: (610) 660-8000 or (888)
643-6735 by Fax: (610) 660-8080 by E-Mail: mhenzel182@aol.com or visit
the firm's Website: http://members.aol.com/mhenzel182


WINSTAR COMMUNICATIONS: Spector Roseman Initiates NY Securities Suit
--------------------------------------------------------------------
Spector, Roseman & Kodroff, P.C. commenced a securities class action
lawsuit on behalf of purchasers of the stock of Winstar Communications,
Inc. (NSDAQ:WCII) during the period from August 2, 2000 through April
2, 2001, inclusive.

The suit, filed in the United States District Court for the Southern
District of New York, names as defendants, the Company and executive
officers:

     (1) William J. Rouhana, Jr., Chief Executive Officer and Chairman
         of the Board of Directors,

     (2) Richard J. Uhl, Chief Financial Officer, and

     (3) Nathan Kantor, President and Chief Operating Officer,

The complaint alleges that the defendants made material
misrepresentations and omissions of material facts concerning the
company's business performance during the relevant time.  The
defendants repeatedly assured investors that the company was performing
well, that the company was enjoying strong growth, and that it was
well-funded to follow its growth-oriented business plan through the
first quarter of 2002.  

At the same time, however, the complaint alleges that the defendants
knew or recklessly disregarded that the Company was overstating
revenues and assets.  In April 2001, contrary to prior representations,
the Company announced that it was halting its expansion and laying off
thousands of employees.  

The company has delayed the filing of its annual Report on Form 10-K
with the SEC and its stock price has collapsed.  

For more information, contact Robert M. Roseman by Phone: 888-844-5862
(toll-free) by E-mail: classaction@spectorandroseman.com or visit the
firm's Website: www.spectorandroseman.com

                              *********

S U B S C R I P T I O N   I N F O R M A T I O N

Class Action Reporter is a daily newsletter, co-published by
Bankruptcy Creditors' Service, Inc., Trenton, New Jersey, and
Beard Group, Inc., Washington, D.C.  Enid Sterling, Aurora Fatima
Antonio and Lyndsey Resnick, Editors.

Copyright 2001.  All rights reserved.  ISSN 1525-2272.

This material is copyrighted and any commercial use, resale or
publication in any form (including e-mail forwarding, electronic re-
mailing and photocopying) is strictly prohibited without prior written
permission of the publishers.

Information contained herein is obtained from sources believed to be
reliable, but is not guaranteed.

The CAR subscription rate is $575 for six months delivered via e-mail.  
Additional e-mail subscriptions for members of the same firm for the
term of the initial subscription or balance thereof are $25 each.  For
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                  * * *  End of Transmission  * * *